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Dell (China) Co., Ltd.: leading sustainable packaging by innovation

2016-05-18Sino-Swedish Corporate Socialadmin0010

Company Profile

Dell Inc., established in 1984, is an IT integrated solutions and services provider. Since it entered China in 1998, it has employed about 8,000 team members, built two manufacturing sites, and established a global support center, Dell's regional headquarters in China, and a global purchasing center. Dell has achieved its purchasing value of USD 25 billion per year in China and has become one of China’s largest exporters.
The larger consumption of forest resources in the traditional packaging materials may not only cause environmental pollution in the local place, but lead to higher logistic cost, which has restricted the sustainable development of IT industry to some extent. Meanwhile, more and more markets and customers, including China, are increasingly concerned about the green packaging. As a global ICT solutions provider, Dell needs to make transformation by its innovation in packaging materials, so that it can obtain materials from local sources and control its cost.
Investigating the needs to utilize local resources
Dell has set up a dedicated engineering team to make research and innovation in the packaging materials. There are two innovation factors. Firstly, the material must be zero-waste, biodegradable, and disposable; and secondly, it must be low-cost both in acquisition and disposal. To this end, Dell has cooperated with suppliers to develop innovative packaging materials including mushrooms, bamboos, straws and others.
In China, Dell, together with its suppliers, has developed packaging materials made from bamboo and straw, both of which are degradable and recyclable. In particular, the tensile strength and fiber of bamboo meet the modern requirements for packaging materials. The growth cycle of bamboo is within three to five years, so its characteristics of natural growth and regeneration are conducive to the water conservation of planting base. Wheat is widely grown in China, but wheat straw is usually burnt by peasants and its economic benefit has not been made full use of. Straw packaging materials has expanded its exiting use and economic benefits.
Industrial chain collaboration
After repeated audits, Dell has decided to build bamboo forest base in Jiangxi, one of major bamboo production area in China, where it has established production line in cooperation with Yuen Foong Yu Group’s Straw Stalk Processing Factory (hereinafter referred to as Yuen Foong Yu Factory), aiming to promote the use of local materials, the logistics cost savings, and the cooperation among the upstream and downstream of industry chain.
In terms of processing technology, Yuen Foong Yu Factory has realized the full use of straw stalk and its recycling application development by adopting its own straw bio-pulping technology and its mechanism for comprehensive use of straw stalk. It has turned waste into treasure from straw recovery to its finished product such as paperboard, paper-plastic packaging materials, fuel rod, organic liquid fertilizer, and mushroom-raising materials.
Sorted packaging
In order to meet the packaging requirements of various products, Dell has developed an overall packaging solution, and defined packaging materials for consumer and enterprise-level products. Mobile phones and laptops are packaged with bamboo-based materials, while the large equipments are packed up with new mushroom-based materials. In the contrast of the tough and lightweight features of the former, the latter is more suitable for heavier products such as servers and desktops.
Dell’s sustainable packaging project has shaped its brand image of sustainable development. As the world’s first adopter of 100% recyclable bamboo-based package, Dell was rated as America’s greenest company in 2010 by “Newsweek”, and also honored as “International Carbon-value Award”, “Most Green IT Brand” and others by United Nations Development Program (UNDP) in 2013.
Economic benefits
Up to now, Dell has adopted the sustainable new package in 50% of its consumer products like XPS, Alienware laptops, and others, and 70% of its enterprise-level products. From its global sustainable package program, Dell has saved packaging cost of USD 18 million, and will strive for further improvement in its future cost control.
At present, the cost of raw pulp or pulping process is about 4500 to 5000 yuan per ton, while the cost of straw pulp is less than 2000 yuan. In the future, the worldwide mandatory carbon tax, and the increasing consumption of energy and water will surely result in the change of pulping cost.
A professional survey on pulping shows that Yuen Foong Yu Factory consumes one third of energy and one fifth of water used by chemical pulping process. Undoubtedly, straw stalk packaging materials factories has clearly showed its long-term advantages in the consumption of water and energy.
In addition, the disposal of package materials of Dell’s products may be a hidden cost for users. In the United States, the legislation in some states requires zero waste in the packages; otherwise the company would face appropriate punishment. Besides the direct cost saved through improved packaging materials, the program also reduces users’ cost in disposing waste packages. They can further recycle, dispose or biodegrade Dell’s packages to meet their environmental wishes.
Social and environmental benefits
Dell’s Sustainable Packaging Program has brought a more positive impact on the local community, environment and users. For example, in the sustainable packaging project organized by Dell and Yuen Foong Yu Factory, the factory has not only obtained the agricultural subsidies when purchasing strawproduction machines, but also get support from the local government. Additionally, Yuen Foong Yu Factory has created more job opportunities for local farmers, and allowed them to enjoy higher utilization and economic benefits of wheat.
According toestimates, Yuen Foong Yu Factory increased the local crop yield by 20% to 50% by recycling materials, grown mushrooms on agriculturalwaste and others. Thousands of tons of straw stalks can only be burned or discarded in the past, causing heavy pollution to local environment. Now, the farmers can sell them to Yuen Foong Yu Factory at tens of yuan per ton.
In addition, Yuen Foong Yu Factory has designated more than 10 pastures as collection stands and hired the local farmers as managers and other positions to collect a large number of straw stalks in each pasture. According to incomplete statistics, the Factory has created 11 job opportunities on average in each pasture.
Dell will completely adopt zero-waste package by 2020 and it will achieve this goal through two ways: ensuring 100% sustainable packaging materials in Dell’s package, including the recyclable and renewable materials or those from waste; and ensuring Dell’s packaging materials can be 100% recycled or degraded at last. In the future, Dell’s Sustainable Packaging Program is expected to influence the food industry and others, so as to effectivelyoptimize thecost structureof packaging materials, and make them more selective.
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